Do First-Time Buyers Need Life Insurance?
It is not legally required, but it is strongly recommended – especially if you are buying with a partner or have dependants. Your mortgage is likely the biggest debt you will ever take on. If you die without life insurance, your family could face:
- Struggling to pay the mortgage on a single income
- Being forced to sell the home
- The lender repossessing the property
How cheap is it really? A healthy 28-year-old non-smoker can protect a £250,000 repayment mortgage with decreasing term life insurance for approximately £6–8 per month. That is less than a single takeaway coffee per week.
Which Type of Life Insurance for a First Home?
| Type | Best For | Cost |
|---|---|---|
| Decreasing term | Repayment mortgage – cover reduces as you pay off the mortgage | Cheapest option |
| Level term | Any mortgage type – cover stays the same throughout | Slightly more |
| Level term + extra | Mortgage plus income replacement for family | Most comprehensive |
How Much Cover?
- Minimum: Your mortgage amount (e.g., £250,000)
- Better: Mortgage + 2–3 years of expenses
- Term: Match it to your mortgage term (typically 25–30 years)
Top Tips for First-Time Buyers
- Arrange it alongside your mortgage – Do not wait until after completion
- Do not buy from your mortgage lender – They typically sell one insurer’s products. An independent comparison finds cheaper options
- Consider two separate policies – If buying with a partner, separate policies offer much better protection than joint
- Place it in trust – Free to set up and avoids potential inheritance tax delays
- Think about CIC – Critical illness cover protects your mortgage if you are diagnosed with a serious illness, not just death
Frequently Asked Questions
Strongly recommended. Without it, your family could lose the home. From ~£6–8/month.
No. Independent comparison usually finds cheaper options than your lender offers.